Conference call to be held tomorrow, December 13, 2022, at 10:00 a.m. ET
Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the second quarter and first six months of fiscal year 2023 ended October 31, 2022.
“Continuing strong business trends fueled our growth across multiple financial and operating measures in the second quarter,” commented Cecilia Lenk, CEO of Netcapital Inc. “Our portfolio companies continued to perform well, and portal activity both from private companies seeking capital and private investors funding innovation remains solid. We look forward to similar trends in the second half of our fiscal year 2023.”
Jason Frishman, CEO of Netcapital Funding Portal Inc., commented, “We have hosted many exciting and lucrative offerings over the past six months and will continue to feature inspiring success stories by our clients in our communications to Netcapital stakeholders. The key purpose of our business is to mentor and support entrepreneurs in their journeys. It’s rewarding to see the benefits of our services as these startups build, expand, and prosper.”
Second Quarter Fiscal 2023 Financial Highlights
- Revenue growth of 48% year-over-year to $1.8 million
- Positive operating income compared to operating loss in the year-ago quarter
- Diluted earnings per share of $0.04 compared to loss per share of ($0.10) in the year-ago quarter
- Equity securities at fair value of $15.1 million at October 31, 2022
- Cash and cash equivalents of $1.6 million at October 31, 2022
First Half Fiscal 2023 Highlights
- Revenue growth of 71% year-over-year to $3.1 million
- Positive operating income compared to operating loss of $1.4 million in the first six months of fiscal year 2022
- Equity securities at fair value increased 18% compared to $12.9 million at April 30, 2022
- Paid down $1 million in debt, closed a $5 million underwritten public offering, and uplisted to Nasdaq in July 2022
For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended October 31, 2022, which has been filed with the Securities and Exchange Commission.
Conference Call Information
The Company will host an investor conference call tomorrow, December 13, 2022, at 10:00 a.m. ET.
Participant access: 844-985-2012 or 973-528-0138
Conference entry code: 914548
For those unable to participate in the live call, a replay will be made available in the Investors section of the company’s website.
About Netcapital Inc.
Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online and provides private equity investment opportunities to investors. The company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies with disruptive technologies. The Netcapital funding portal is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.
NETCAPITAL INC.
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Assets: |
|
October 31, 2022
|
|
April 30, 2022
|
||
Cash and cash equivalents |
|
$ |
1,565,242 |
|
$ |
473,925 |
Related party receivable |
|
|
668 |
|
|
668 |
Accounts receivable net |
|
|
2,269,800 |
|
|
2,433,900 |
Other receivables |
|
|
16,604 |
|
|
— |
Prepaid expenses |
|
|
39,236 |
|
|
5,694 |
Total current assets |
|
|
3,891,550 |
|
|
2,914,187 |
|
|
|
|
|
||
Deposits |
|
|
6,300 |
|
|
6,300 |
Notes receivable – related parties |
|
|
202,000 |
|
|
202,000 |
Purchased technology, net |
|
|
15,494,542 |
|
|
15,536,704 |
Investment in affiliate |
|
|
240,080 |
|
|
240,080 |
Equity securities at fair value |
|
|
15,112,601 |
|
|
12,861,253 |
Total assets |
|
$ |
34,947,073 |
|
$ |
31,760,524 |
|
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
|
|
|
||
Trade |
|
$ |
451,903 |
|
$ |
536,508 |
Related party |
|
|
75,204 |
|
|
378,077 |
Accrued expenses |
|
|
250,179 |
|
|
229,867 |
Stock subscription payable |
|
|
10,000 |
|
|
33,400 |
Deferred revenue |
|
|
660 |
|
|
2,532 |
Interest payable |
|
|
270,083 |
|
|
222,295 |
Deferred tax liability, net |
|
|
779,000 |
|
|
977,000 |
Related party debt |
|
|
19,660 |
|
|
22,860 |
Secured note payable |
|
|
400,000 |
|
|
1,400,000 |
Current portion of SBA loans |
|
|
1,896,737 |
|
|
1,890,727 |
Loan payable - bank |
|
|
34,324 |
|
|
34,324 |
Convertible notes payable |
|
|
— |
|
|
300,000 |
Total current liabilities |
|
|
4,187,750 |
|
|
6,027,590 |
|
|
|
|
|
||
Long-term liabilities: |
|
|
|
|
||
Long-term SBA loans, less current portion |
|
|
489,063 |
|
|
495,073 |
Total liabilities |
|
|
4,676,813 |
|
|
6,522,663 |
|
|
|
|
|
||
Commitments and contingencies |
|
|
— |
|
|
— |
|
|
|
|
|
||
Stockholders' equity: |
|
|
|
|
||
Common stock, $.001 par value; 900,000,000 shares authorized, 4,312,777 and 2,934,344 shares issued and outstanding |
|
|
4,313 |
|
|
2,934 |
Shares to be issued |
|
|
244,250 |
|
|
244,250 |
Capital in excess of par value |
|
|
27,263,174 |
|
|
22,479,769 |
Retained earnings |
|
|
2,758,523 |
|
|
2,510,908 |
Total stockholders' equity |
|
|
30,270,260 |
|
|
25,237,861 |
Total liabilities and stockholders' equity |
|
$ |
34,947,073 |
|
$ |
31,760,524 |
NETCAPITAL INC.
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|
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Three Months Ended |
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Three Months Ended |
|
Six Months Ended |
|
Six Months Ended |
||||||||
|
|
October 31, 2022 |
|
October 31, 2021 |
|
October 31, 2022 |
|
October 31, 2021 |
||||||||
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
1,778,973 |
|
|
$ |
1,199,822 |
|
$ |
3,119,546 |
|
$ |
1,825,009 |
|
||
Costs of services |
|
|
36,235 |
|
|
|
17,775 |
|
|
57,298 |
|
|
46,080 |
|
||
Gross profit |
|
|
1,742,738 |
|
|
|
1,182,047 |
|
|
3,062,248 |
|
|
1,778,929 |
|
||
|
|
|
|
|
|
|
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Costs and expenses: |
|
|
|
|
|
|
||||||||||
Consulting expense |
|
|
199,781 |
|
|
|
183,030 |
|
|
325,392 |
|
|
365,635 |
|
||
Marketing |
|
|
32,882 |
|
|
|
22,000 |
|
|
40,662 |
|
|
43,826 |
|
||
Rent |
|
|
17,187 |
|
|
|
10,481 |
|
|
34,399 |
|
|
22,611 |
|
||
Payroll and payroll related expenses |
|
|
876,908 |
|
|
|
730,296 |
|
|
1,646,848 |
|
|
1,791,655 |
|
||
General and administrative costs |
|
|
280,815 |
|
|
|
561,370 |
|
|
673,112 |
|
|
956,422 |
|
||
Total costs and expenses |
|
|
1,407,573 |
|
|
|
1,507,177 |
|
|
2,720,413 |
|
|
3,180,149 |
|
||
Operating income (loss) |
|
|
335,165 |
|
|
|
(325,130 |
) |
|
341,835 |
|
|
(1,401,220 |
) |
||
|
|
|
|
|
|
|
||||||||||
Other income (expense): |
|
|
|
|
|
|
||||||||||
Interest expense |
|
|
(22,978 |
) |
|
|
(35,026 |
) |
|
(59,290 |
) |
|
(70,271 |
) |
||
Gain on debt conversion |
|
|
— |
|
|
|
— |
|
|
224,260 |
|
|
— |
|
||
Amortization of intangible assets |
|
|
(21,081 |
) |
|
|
— |
|
|
(42,162 |
) |
|
— |
|
||
Realized loss on sale of investment |
|
|
— |
|
|
|
— |
|
|
(406,060 |
) |
|
— |
|
||
Unrealized gain (loss) on equity securities |
|
|
(8,968 |
) |
|
|
— |
|
|
(8,968 |
) |
|
3,275,745 |
|
||
Total other income (expense) |
|
|
(53,027 |
) |
|
|
(35,026 |
) |
|
(292,220 |
) |
|
3,205,474 |
|
||
Net income (loss) before taxes |
|
|
282,138 |
|
|
|
(360,156 |
) |
|
49,615 |
|
|
1,804,254 |
|
||
Income tax expense (benefit) |
|
|
99,000 |
|
|
|
(86,000 |
) |
|
(198,000 |
) |
|
621,000 |
|
||
Net income |
|
$ |
183,138 |
|
|
$ |
(274,156 |
) |
$ |
247,615 |
|
$ |
1,183,254 |
|
||
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share |
|
$ |
0.04 |
|
|
$ |
(0.10 |
) |
$ |
0.07 |
|
$ |
0.48 |
|
||
Diluted earnings (loss) per share |
|
$ |
0.04 |
|
|
$ |
(0.10 |
) |
$ |
0.07 |
|
$ |
0.47 |
|
||
|
|
|
|
|
|
|
||||||||||
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
||||||||||
Basic |
|
|
4,289,802 |
|
|
|
2,718,383 |
|
|
3,729,174 |
|
|
2,462,251 |
|
||
Diluted |
|
|
4,290,052 |
|
|
|
2,718,383 |
|
|
3,729,424 |
|
|
2,497,808 |
|
||
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221212005786/en/
Contacts
Investor Contact
800-460-0815
ir@netcapital.com
